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What Do You Think Shape of Water’s Best Picture Win Means to Disney and Bob Iger?

Two business podcasts. Two different answers to the same question: What do you think Shape of Water’s Best Picture win meant to Disney CEO Bob Iger? He is, after all, the guy in the process of buying the company, Fox Searchlight, that made Shape of Water. Heck, that same company also made Three Billboards Outside Ebbing, Missouri, this year’s other Best Picture frontrunner. Do the future Shape of Water’s and Three Billboards of the world even get made at Fox Searchlight under Iger’s watch?

First up, KPCC’s The Frame. Here’s host John Horn talking to Vanity Fair’s Rebecca Keegan (pictured below):

Horn: The Walt Disney company has never won a Best Picture Oscar, and in the audience last night was Bob Iger, the head of Disney. So, I would imagine that he looks at Fox Searchlight and says, “They don’t make as much money in a year as Black Panther makes in a week, but we want to be in the prestige film business at some point.”

Keegan: The early signs I’ve seen in my own reporting is that Disney and Iger do not want to change Searchlight. They think they’re good at what they do. They bring an element that, as you say, they would like the prestige, they would like the Oscars to be added to their enormous commercial success. Of course, they’ve had success in the animated categories but not in the Best Picture race. So, it seems like a natural partnership. Really, not since Miramax went away has Disney been playing in this game.

Well, that’s encouraging.

Next up, APM’s Marketplace. Here’s host Kai Ryssdal and The Wall Street Journal’s entertainment reporter Ben Fritz (pictured below), who stopped by to promote his new book The Big Picture: The Fight for the Future of Movies:

Ryssdal:  What do you think was running through [Bob Iger’s] mind as he debates this acquisition of Fox studios and sees none of his Disney movies up for the big awards?

Fritz: I interviewed Bob Iger for the book. I think he’s thinking, “This is a great show. I like the movies. This is good for my ABC network but totally irrelevant to my business.” When I interviewed him the movie Spotlight had won Best Picture recently and he said, “I love that film. It was great, but films like that are not a business. I’m a businessman, and the movies that are good businesses are Marvel, Star Wars, and Pixar.” You could say on the one hand, “That’s sad because the diversity of films we used to get are shrinking.” But on the other hand, the profits made by Disney’s movie studio are higher than anyone’s ever seen in the movie business. They’re talking margins of about 30% per year for Disney’s movie studio when what’s typical is like 10%.

Huh. That’s a little less encouraging. Iger did tell investors, “[We’re] very interested in what Searchlight accomplished and . . . we fully intend to stay in those businesses,” but as Fritz’ book also reveals through its analysis of the Sony hacked emails studio heads and CEOs lie their asses off to investors all the time.

So, who’s right? Keegan or Fritz?

Short answer: Both of them?

Slightly longer answer: To continue bankrolling smaller films which are made with the understanding that very few of them will ever hit and even those that do probably won’t hit it all that big runs completely counter to Iger’s M.O. to this point. He doesn’t give a shit about Oscars; he cares about making money, and there’s very little money in winning Oscars these days. However, to treat Fox Searchlight like a known brand with reliable people in charge would also be entirely in keeping with Iger’s approach to Marvel, Pixar, and LucasFilm.

Much, much, much longer answer: Two weeks before Iger was selected to be Michael Eisner’s successor as Disney CEO, the company went into the Oscars ceremony at the Kodak Theater with the most combined nominations of any studio. Miramax, which Disney had owned since 1993, scored a combined 18 nominations between The Aviator and Finding Neverland, and The Incredibles (made by Pixar and distributed by Disney) had been showered with an uncommonly-high-for-an-animated-film 4 nominations. Disney left that night with some claim to 7 different Oscars (5 for Aviator, 2 for Incredibles) but lost Best Picture to Warner Bros.’ Million Dollar Baby. WB had the bragging rights to the night’s top prize, but Disney had at least won the numbers game, even if people didn’t quite think of the independently-run Miramax and Pixar as being Disney proxies at that time.

These are the kinds of things that mattered to Iger’s ego-driven predecessor, Eisner, as well as to Dick Cook, then-head of the film studio. Iger, though, didn’t see the money or future in it.

For example, let’s focus on something Keegan said: “Not since Miramax went away has Disney been playing in this game.”

But Miramax didn’t just go away; Bob Iger sold it. Within two years of his taking over Disney, Miramax actually brought Iger a Best Picture winner. In fact, the year that happened Miramax was actually competing against itself for Best Picture, with No Country for Old Men up against There Will Be Blood, both co-distributed by Miramax and Paramount Vantage. That didn’t stop Iger from later selling the company for less than what Black Panther just made in its first two weeks. That’s because a Weinstein-less Miramax was worthless to him. Heck, even if the Weinsteins had stayed Miramax still might not have survived.

Two Best Picture contenders with a Disney-owned studio behind them?
Why does that sound familiar?

Let’s back up.

In 2005, shortly after Iger’s promotion to Disney CEO the Weinstein’s bolted from Miramax to form their own studio. As detailed in Fritz’s book, Iger’s impulse was to then immediately shudder Miramax, which had once been responsible for Oscar contenders like Pulp Fiction and Good Will Hunting and, of course, the Best Picture winner Shakespeare in Love (cue the old “Saving Private Ryan was robbed!” chestnut). The problem, though, is Miramax always just barely managed to eke out a profit, and when it did it was largely because of the money brought in by Bob Weinstein’s genre-oriented subsidiary Dimension Films, which raked in millions on the Scream and Scary Movie franchises.

When the Weinsteins left they took all of the industry contacts and relationships which had made those films possible. Without them, Miramax was just a name, yet another production house which enjoyed a solid run before going the way of Carolco Pictures, PolyGram Films, and Orion Pictures. Its only value was its vast film library.

Dick Cook, with his nearly 40 years of experience at Disney, vehemently disagreed. He argued, along traditional industry lines, that maintaining a presence in the admittedly shaky prestige business was worth it for what it signaled to mature moviegoers and actors, writers, and directors. The Disney board indulged Cook.

Veteran executive Daniel Battsek was named the new head of Miramax and handed $300 million a year to produce six to eight movies, as opposed to the $600 million for up to 20 movies the Weinsteins had been receiving. This forced him to seek out co-production partnerships with specialty labels like Paramount Vantage (now defunct) and Focus Features (alive and kicking with Phantom Thread, Lady Bird, and Darkest Hour to its name recently).

Iger, Amy Adams, and Battsek. Sidenote: If Iger looks surprisingly TV-handsome to you it might be slightly less shocking to learn he was once a TV weatherman.

Within two years, Battsek steered the new Miramax to a Best Picture win with No Country for Old Men, the Coen Bros. masterpiece which grossed $171m worldwide off a $25m budget. He also got in on eventual awards contenders like The Queen, Gone Baby Bone, The Diving Bell and the Butterfly, and Doubt. He also missed on several of his swings, like The Hoax (a $25m Richard Gere historical comedy which brought in less than $12m) and Everybody’s Fine (a $21m De Niro family drama which netted just $16m). Sadly, from 2006 to 2009 Miramax’s 38 total releases averaged a domestic gross of just $7m.

So, for every single year Battsek was in charge Iger tried to sell Miramax. In 2009, he finally got his way, offloading the diminished studio to an investment group for just south of $700m. 2010’s Jason Bateman-Jennifer Aniston rom-com The Switch then became the final film of the Disney-Miramax partnership. It grossed a vaguely respectable $49.9m against a $19m budget. That was the same year Disney’s live-action Alice in Wonderland stunned the industry by cracking a billion worldwide. By the end of the year, The Switch landed just outside Disney’s top 10 grossing titles, and it most certainly didn’t lead to any games, Disney theme park attractions, toys, or a sequel the way Alice did. Past, meet future.

Ah, the classic “Why is Jason Bateman looking at that cup of semen like it’s an enticing jello shot?” poster.

Not too long after that, Bob Iger fired Dick Cook and Daniel Battsek. Cook now serves on the Board of Legendary Pictures, and after a run with National Geographic Films, Battsek became President of the art-house distribution company Cohen Media Group.

This historical example is illustrative to us for three reasons: 1) It reinforces Iger’s long-held belief that prestige business is bad and a waste of time; 2) It shows how little sway a successful Oscar season has on him; 3) It shows what might happen if a once-great company suddenly loses its leadership after an Iger takeover.

So, who are the leaders at Fox Searchlight? Co-presidents Stephen Gilula and Nancy Utley, obviously, and co-presidents of production Matthew Greenfield and David Greenbaum. If you watched the Oscars this year, Greenfield’s the one who tried to give a Best Picture acceptance speech of his own after Guillermo del Toro but had his mic cut off. Greenbaum was up on the stage as well, and he goes way back with the Oscars. He started his career at Miramax during the Battsek era meaning he was involved with both No Country for Old Men and There Will Be Blood.

According to Vanity Fair, Gilula and Utley are long-tenured and respected but the day-to-day running falls to the Greens, who are responsible for “developing, budgeting, casting, and producing” the studio’s in-house efforts. They’ve been burned too hard in the past by costly film festival acquisitions that fail to pay off (like the $17.5m they paid for Birth of a Nation in 2016 and $9.5m for Patti Cake$ last year). So, they’re focusing more on making their own movies, with budgets in the $15m to $20m range. The “let’s make better movies of our own” ethos should appeal to Iger, but the profit margins? Well…

Even with awards contenders like Grand Budapest, Birdman, 12 Years a Slave, and Brooklyn, the average Searchlight film over the past 4 years grossed less than $9m domestic.

For their part, the two Greens told Vanity Fair, “We hope that any company will value what we do. We feel like the filmmakers we work with . . . [could] then go on to make big movies for the main division.”

So, treat them like the farm team to cultivate talent that can then later be called up to the big leagues for Marvel and Star Wars movies? Not a bad pitch, but the rest of the industry is kind of already serving that purpose anyway, albeit involuntarily.

Should Gilula and Utley or the two Greens follow Ryan Murphy’s lead and jump ship to Netflix or Amazon then the Searchlight label Iger is absorbing into Disney might be deemed expendable or at least valued only for its back catalog of titles. These people aren’t as well-known as the Weinsteins were in their day, of course, but they’ve still built up relationships in the industry. So, then the next time Guillermo del Toro wants to make a monster movie he won’t go to Fox Searchlight but instead to the people who greenlit Shape of Water, Greenfield and Greenbaum, wherever they might end up.


Gilula and Utley
Matthew Greenfield, del Toro, David Greenbaum, and Birdman’s Alejandro G. Inarritu
Fox Searchlight is currently headquartered on the historic 20th Century Fox lot, the same lot the Murdochs are keeping as part of the sale. Disney has agreed to rent the space from the Murdochs, though.

Fritz is right – the history says Iger doesn’t give a damn about Oscars, and he will happily kill any specialty labels regardless of how the industry might react. Miramax? Touchstone? Fox Searchlight? Doesn’t matter. It’s Disney’s world, and we’re all just living in it. Anyone in Hollywood who doesn’t like it can go work for Netflix.

But Keegan is also right. Taking a hands-off approach to Fox Searchlight would work into Iger’s preferred management style. He leaned on Ed Catmull and John Lasseter to teach him the Pixar way and has now spread it throughout the entire Disney film family, leaning on Disney studio head Alan Horn to set up brain trusts at Marvel, Pixar/Disney Animation, and LucasFilm to steer everything in the right direction. Under Iger and Horn, Disney has been the rare studio to preach quality over quantity and not sweating release date delays or reshoots if that’s simply what proves to be necessary to getting something made that people will remember.

The inspiration for this article, of course, is the curious case of 2017’s Best Picture winner coming from a company which is currently in the process of being sold. Fox Searchlight, however, is but one small part of the vast library of businesses Disney is about to inherit. In fact, there’s a large school of thought that Disney’s main interest in Fox is simply the possibility of inheriting a controlling interest of European broadcast group Sky. This would allow Disney to make further inroads into the international TV market at a time when the domestic market has flattened out. Comcast are being total dicks about it, though, and just outbid Fox’s current pending-government-approval offer for Sky.

For more context on the Disney-Fox merger, here’s a wonderful Infographic from

So, Iger might have too much on his plate to bother worrying about Fox Searchlight, and unlike the Miramax example, he has a new streaming service to think about here. Iger found a buyer for Miramax because its vast film library still had value; Fox Searchlight could be kept at Disney for that very same reason – the obvious value it would bring to Disney’s Netflix killer. Shape of Water winning Best Picture, then, presumably adds to Fox Searchlight’s reputation.

Iger wants brands and comfortable profit margins; with Fox Searchlight, he’d at least be getting the former, assuming the specialty studio keeps up its pace as a perennial Best Picture contender.

But, you know how Iger told Fritz he loves Spotlight but movies like that aren’t good business? In the years since he said that, Open Road Films, the studio which distributed Spotlight, floundered to the point of being sold by its parent companies (AMC and Regal) to Chinese-backed Tang Media. Undaunted, Open Road’s CEO Tom Ortenberg told The Los Angeles Times, “I’m bullish on the midsize space, I happen to think our upcoming slate is the best we’ve ever had. We’ll probably be taking some bigger swings [now].” The three films Open Road has released since the deal was announced – Home Again, Marshall, and All I See Is You – grossed a combined $43.6m against $54m in production budget commitments, not to mention the untold millions in marketing and distribution costs.


Define irony: A prestige movie about the social importance of a dying industry is itself made by a dying company in a dying business.

And the last time Iger gambled on non-franchise live-action films with slight awards aspirations the market punished him to the tune of a $75 million write-down on The Finest Hours and millions more on Queen of Katwe. Disney has since abandoned any pretense of producing anything that isn’t a franchise or live-action remake. Do Fox and Fox Searchlight become specialty arms that are simply better at that kind of thing than Disney has been lately? Or do they each have their release slates halved and identities rebuilt around brands, such as Fox’s Avatar and Aliens and Fox Searchlight’s….umm….umm….could Wes Anderson maybe make a Great Budapest Hotel?

Fritz’s book makes it clear that the industry and, indeed, often the very people who work for him don’t know what Iger will do. He shocked everyone when he bought Marvel for $4b. His $4b purchase of LucasFilm caught everyone at 20th Century Fox off guard even though they’d been the exclusive home for Star Wars movies since the beginning, and now his nearly $70b purchase of 21st Century Fox has the entire industry in turmoil. So, what’s he going to do with a small, boutique label like Fox Searchlight that just wants to make the best movies possible and win some Oscars?

Well, can you turn Shape of Water into a Disneyland ride? No, but you can make the next Shape of Water or Three Billboards a prestige original movie for a streaming service aiming to kneecap Netflix’s creeping straight-to-video reputation.

UPDATE 3/8/18: Earlier this morning, Bob Iger was again asked at an investors meeting about his plans for Fox Searchlight and he again pledged a hands-off approach, “We don’t have any plans right now to change what they do. We have every intention to maintain the business of Fox Searchlight. We think they’re in the business of making high-quality films. We think there’s ample opportunity for us as a company to support those efforts.”

Sources: The Big Picture, Marketplace, The Frame,, Vanity Fair


  1. I can’t remember where, but I read that Disney renting the lot from Fox is part of the deal. For now.

    Yeah, I agree. Walt Disney always wanted to win a best picture academy award (at least he got one nomination before his passing), but at the end of the day, the turn over counts. Disney might brag with its collection of “best song, best soundtrack, best animated picture” collection, but after all the years of their movies being treated as “lesser” than what the other studios do, I doubt that they care anymore. And Iger mostly cares about the bottom line anyway.

    But I also think that they will try to turn searchlight into a brand. After all, there is a market for this kind of movie. You just have to convince people to go and see them. And even if they don’t, for the streaming service they need a balanced library to get as many viewers as possible. Not that they have to worry about THAT. It seems as if Fox bought as many defunct studios as possible at one point.

    1. “I can’t remember where, but I read that Disney renting the lot from Fox is part of the deal. For now.”

      I’ve read that as well, which, really, bravo to the Murdochs for sticking that in there. Not only do we get to keep the historic studio grounds which Marilyn Monroe used to call home we also get to charge you rent for it. We keep our building and gain a rent-paying tenant in the process.

      The whole thing with this is that it both plays entirely against and entirely with Iger’s M.O. He loves brands. He’s built his entire business around it, and no one can knock him for that considering his insane profit margins. So, Fox Searchlight could easily be another brand to him. But, at the same time, he’s had a better-branded version of Searchlight before and he fought to sell it for years before the board finally relented. He just fundamentally does not believe in the prestige movie business, and both his own experiences with that as well as the experiences of his competitors – Open Road, even Searchlight – spells that out.

      The wildcard, though, as you pointed out is the streaming service. That’s what’s different this time, and considering how forward-thinking he’s been I could very easily see him turning Searchlight into a production house exclusively working for the new streaming service or, if that’s off-brand for the Disney-specific service, then Hulu. If he does keep it around as a theatrical entity, though, I will be surprised if he lets them continue making/buying up to 10 movies a year. Their model of taking a bunch of chances and only ever hitting with one or two of them a year is the complete opposite of what he does. I could see him forcing them to cut their release slate by as much as half and focus more on quality, perhaps even telling them to stop wasting money at film festivals (as they did with Birth of a Nation and Patti Cake$) and instead focus on in-house producing/developing 5 or 6 Shape of Waters/Three Billboards of their own every year.

      1. To be fair, Miramax was a little bit too edgy for Disney. Fox Searchlight isn’t, most of their movies could pass off as a more serious version of a Disney movie.

        I guess it depends on how much money Fox searchlight makes off their more risky projects. As long as they still run in the black numbers, he will most likely leave them be and only look into their marketing.

      2. True. Once Iger gets a look at the books he’ll make up his mind. That’ll give him an obviously far more informed opinion than what we can arrive at through looking at BoxOfficeMojo. I have no sense of, for example, what kind of streaming deals Searchlight has for its movies after they leave theaters. They’re not on Netflix, I know that much. In general, Fox seems to prefer to hold its own movies close to the vest to be pumped through the various FX movie channels nonstop.

      3. And don’t forget Hollywood accounting…yeah, those movies don’t make the big bucks, but that doesn’t necessarily mean that they lose money. All depends on the original budget.

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